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ISLAMABAD: The Privatisation Commission is all set to privatise Pakistan International Airlines Corporation Ltd (PIAC) on December 23 (Tuesday), as only three bidders remain in the race after the exit of Fauji Fertiliser Company Ltd.
According to the programme circulated by the Privatisation Commission on Sunday, bids will be submitted between 10:45am and 11:15am, while bids will be opened at 3:30pm, a process that will be shown live on television networks, as decided by the government.
The three bidders are: a consortium comprising Lucky Cement Limited, Hub Power Holdings Limited, Kohat Cement Company Limited, and Metro Ventures (Private) Limited; a consortium comprising Arif Habib Corporation Limited, Fatima Fertiliser Company Limited, City Schools (Private) Limited, and Lake City Holdings (Private) Limited; and Air Blue (Private) Ltd.
Chairman of the Privatisation Commission and Adviser to the Prime Minister on Privatisation, Muhammad Ali, said during a YouTube interview that Fauji Fertiliser Company Ltd had decided to quit the bidding process for PIA.
Mr Ali explained that on Tuesday, after submission, the sealed bids will be placed in a transparent box, following which the board of the Privatisation Commission will meet and fix the reference price.
Thereafter, the Cabinet Committee on Privatisation (CCoP) will meet and approve the reference price, which will be announced during the opening of the bids.
He further explained that if bids are higher than the reference price, there would be an open auction. However, if the bids are less than the reference price, priority will be given to the highest bidder.
About the next step, the adviser said that the federal cabinet will approve the transaction within days, followed by the signing of the documents which the Privatisation Commission has received from the bidders. After the signing of the documents, the commission will have 90 days to fulfill some procedures, including the transfer of properties, liabilities and leased aircraft.
Transaction structure
As per the transaction structure, the bidding will be on the basis of a 75 per cent stake in PIA. Out of the 75pc bidding amount, 92.5pc will go to PIA instead of the national exchequer, while only 7.5pc will go to the national exchequer.
He said 25pc of PIA shares will remain with the government, which will be a valuable asset. However, the successful bidder will have the option to acquire the remaining 25pc after payment or leave it with the government.
According to Mr Ali, the valuation of the remaining 25pc shares of PIA will take place after the decision on the 75pc stake. The government has given bidders the option to decide whether to pay for the remaining 25pc within 12 months with a 12pc premium.
The bidders will have to take a decision on the 75pc stake on Tuesday, whereas for acquiring the remaining 25pc , they would have to take a decision within 90 days.
He said the bidders had sought to make payment for the 75pc stake over one year; however, the government did not agree to this proposal. If the performance of PIA declines within a year, the bidder would decide against the purchase, and if performance improves, the bidder would decide in favour, which would be unfair to the government, he said.
He said the winning bidder will deposit two-thirds of the bid within 90 days, while the remaining one-third will be deposited within a year.
Mr Ali said the revival of PIA would have an impact on GDP growth and the economy as a whole.
Pakistan has the lowest contribution of the aviation industry to GDP. Compared to 18pc in the UAE and 8.5pc in Saudi Arabia, Pakistan’s aviation sector contributes only 1.3pc to GDP. However, due to the potential in PIA, this percentage would increase considerably, he said.
Of PIA’s 34-aircraft fleet, only 18 aircraft are currently in operation. However, PIA has air service agreements with 97 countries, besides landing rights in over 170 countries.
PIA’s current net profit is Rs11 billion, with equity of Rs30bn. He said liabilities of Rs26bn will remain with PIA, and bidders will pay these over five years.
About the employees, he said that under the proposed agreement, no employee can be fired for one year. Employees’ pensions and perks are fully protected, while the pension liabilities of retired employees, including medical benefits and discounted tickets, will be borne by the holding company.
He said that in 2011, PIA had 11,500 employees, which has now reduced to 6,500, a reduction of 5,000 employees over five years.
Mr Ali said PIA is such an asset that if not properly managed, colossal sums of money will be lost; however, if run with proper management, it could generate mammoth earnings. With a country of 250 million people, PIA has customers, destinations, routes and landing slots.
What is required, he said, is investment, the addition of aircraft and efficient management, which the government cannot provide.
The type of decision-making required at PIA can only be undertaken by the private sector, and if the airline is properly managed, PIA could return to its glory days, Mr Ali remarked.
Published in Dawn, December 22nd, 2025
